Customer Worth

You should know how much a customer is worth to you.

Unless you know the true value of a customer (to your business) then how can you decide how much you are prepared to spend to acquire one?

Customers are often worth more to us than we realise. This is particularly true in the case of services. Below is a method of calcualting the worth of a customer to your business.

 


VALUE CALCULATOR

 

  • On average, a new customer will buy from the business for ____ years.

     

  • And, on average, a new customer will generate ___ orders per year.

     

  • The average order value is £___.

    So, Lifetime Income from a new customer is:

     

  • ___ years x ___ orders pa x £___ order value = £___.

    Therefore, with an average Gross Margin of ___%,

     

  • A new customer will generate a Lifetime Gross margin of £___.

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    In the business world customer value is important, even with property management business and For Sale by Owner Businesses there is a need to grow and maintain the relationships.

    WHAT NEXT?

    Now you know how to calculate to find out how mauch a customer is worth. With this value in mind you can decide on what ways you can retain customers and how much you can spend to aquire new customers. This is were crm and email marketing can be very profitable.

    Business value

    An interesting way of looking at a sites value is to do a backlink analysis using a backlink explorer such as SEO Magnifiers Site Explorer. This allows to to see how strong the seo is for a site and then estemate what it will take to reproduce it. This is a very basic way of looking at part of the value of a businesses website. YOU should also consider domain age, were it ranks for keywords ( you can check this using a rank tracker ) and you should look a the sites page rank. The better all these are the more value the web site will have.